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House of Commons Hansard #242 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was culture.

Topics

Ways And MeansGovernment Orders

10:30 a.m.

Some hon. members

Agreed.

Ways And MeansGovernment Orders

10:30 a.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I rise on a point of order. I do not want to be unfair to my colleagues across the way, but I think there was an understanding, and perhaps some colleagues did not know it, that they were requesting a recorded division. You might want to ask the question again, Mr. Speaker.

Ways And MeansGovernment Orders

10:30 a.m.

The Deputy Speaker

I would be pleased to do that. Is it the pleasure of the House to adopt the motion?

Ways And MeansGovernment Orders

10:30 a.m.

Some hon. members

Agreed.

Ways And MeansGovernment Orders

10:30 a.m.

An hon. member

On division.

(Motion agreed to)

The House resumed from June 9 consideration of the motion in relation to the amendments made by the Senate to Bill C-55, an act respecting the advertising services supplied by foreign periodical publishers, and of the amendment.

Foreign Publishers Advertising Services ActGovernment Orders

June 10th, 1999 / 10:30 a.m.

Reform

Charlie Penson Reform Peace River, AB

Mr. Speaker, although I have had an interruption of several hours and time to reflect on the merits of the Senate amendments and the amended bill, it has not changed my mind.

Last night I was puzzling over the fact whether the heritage minister, in her grand design and maybe in her new capacity as playwright once she leaves the House in the capacity of heritage minister, has designed the production of a play that is either a farce or a tragedy. I have had time to reflect on that and it has to be in the category of a farce. Nothing else would really fit the badly and almost comical way the government has handled the issue of split-run magazines.

This is all about the government having picked a fight with the Americans on an issue that it absolutely lost. It picked a fight and expended a tremendous amount of energy in an area which it knew it could not win. The government thought it would have a lot of people rally behind it, even in its own cabinet, and that simply did not happen.

I suggest this was a badly flawed bill right from the very beginning. The chickens have come home to roost and now we have the amended version of Bill C-55.

There has been a loss of credibility by Canada as a result of the government's actions on the world stage. We have legitimate concerns. We have legitimate problems with the Americans in areas where we need to fight the good fight. Softwood lumber is one of those areas. The matter of whether we are dumping cattle into the United States is another one. Softwood lumber is a very big issue in British Columbia. There are many of them.

This is the same government, by the way, which assured Canadian forest companies that if they signed the softwood lumber agreement we would have five years of peace with the Americans. The government's assurances are basically a bit like a Hollywood movie set. There is a false front, the nice looking hotel, with nothing behind it. That is how the government handles it. It tries to pretend that it is protecting Canadian interests when all it gives is empty rhetoric. It goes on and on.

On the issue of culture the government told us that there was a tremendous exemption which would protect the Canadian cultural industry. The cultural industry is based on that so-called cultural protection, and what do we find? It was not there but it keeps it going.

Now the government is telling the cultural industry that it will take it to the World Trade Organization in the next round of negotiations and that it will give the industry a new cultural instrument, a new cultural agreement in the World Trade Organization. If the cultural industry accepts that premise and builds its policies based on that, it will be disappointed once again.

It is not the only industry that has been subject to the Liberal government's fancy footwork in terms of pretending that it will protect them. As I said softwood lumber is one example, but it goes beyond that.

At the World Trade Organization-GATT back in 1993 in the Uruguay round, the government told the supply management industry that it would protect it and that it would not allow other countries to do away with article 11, which essentially was border closures or no access into Canada of dairy, chicken and eggs. What did we get? We lost. We lost and we had to accept tariffs. We still have very high tariffs in those industries but they will be coming down too.

I suggest supply management cannot believe the government either. It is now telling supply management that we lost at the Uruguay round but, not to worry, at the new round of the World Trade Organization it will protect that industry. I believe that assurance is worth nothing. The government knows that cannot be done, so it is misleading the Canadian public and it is misleading those industries.

How do we regulate a cultural sector. We do not even have a good definition of culture. There is not agreement in Canada on what culture is. There certainly is not an agreement on the Liberal side. We know that there were different ideas by different ministers. How do we regulate that? I suggest it cannot be done.

This does not mean that culture does not deserve Canadians supporting that sector. A better approach, one that is more enlightened, might be to promote our culture in the international trade forum, just like we do with any other business sector. Let us promote culture at our embassies and consulates. It deserves it. We know that Canadian artists deserve that promotion as well. That is a forum that is possible. It is possible to do.

There is another way in which we might address the issue. There are problems with Canadian films getting distribution rights. I suggest that we might look at international competition law or even Canadian competition law. We could even go beyond that and into the United States where competition law might be applied and where there is too much concentration in the hands of one set of business people.

There are forums to be used, such as competition law, to break down that terrific monopoly so that it is possible for Canadians to distribute their own films in their own country. There are things we can do but we have to be realistic. Pretending we can protect them in the forums of this government and in Bill C-55 is simply not realistic.

There are problems that may make Bill C-55, as amended, not even possible to implement. What might they be? On the matter of how much advertising revenues will be permitted for American publications by Canadian advertising companies there is a formula set in place: 12%, 15% and 18% by the end of a three year period. Canadian advertising companies are set to challenge that content regulation because they are being restricted under the charter. That is a substantial issue in itself.

What about the agreement? If it is based on gross revenue, net revenue or after tax profit, who will police it? Will we have another set of culture cops travelling around trying to decide what the revenue base should be? That is exactly what will happen. I suggest there is not common understanding, even with the United States, in the letters that were exchanged.

Do foreign publishers investing in Canada in the other section need to publish magazines with a substantial Canadian content or a majority content? In the letters exchanged just last week we can see where the problem is already starting to percolate.

These letters say that the United States accepts the terms of the agreement which state that a net benefit review by Canada of new investments in the magazine industry will include undertakings from foreign investors which result in a substantial level of original editorial content. The United States is saying a substantial level.

What is Canada saying? Canada is saying that we will use guidelines which call for a majority of original editorial content.

I thought we had an agreement. What kind of an agreement do we have when we cannot even get right if investment in Canada by American companies will have substantial content or majority content? They are entirely different.

We are sowing the seeds for the failure of this agreement. I suggest the Liberal government knew that all along. It is just another Hollywood movie front, the false front it is hiding behind, pretending that it is protecting the cultural industries. That is one aspect of a future problem.

Another aspect is that the Liberal government, in its lack of wisdom, will go into a policy that subsidizes Canadian cultural magazine publications upfront. The Americans are asking, if that is the case, whether they should qualify for it.

We have signed international treaties. We signed the NAFTA agreement. We signed the World Trade Organization-GATT agreement which says that we need national treatment. It is in there. Does the government not realize what kinds of international agreements it has signed? If the government subsidizes Canadian publications it will have to subsidize American publications as well. How absurd.

The whole concept of subsidies is wrong. It is ironic that we will now subsidize American publications. Is this not the height of irony?

In addition, how long will these subsidies last? Canada is going to the World Trade Organization millennium round, kicking off in Seattle this year, to argue against subsidies. It will argue to phase out subsidies internationally. The trade department is doing that and I agree 100%. The Reform Party has suggested that subsidies distort the marketplace. There is no place for them and in fact they are damaging sectors like agriculture very badly.

While the Liberals are speaking from one side of their mouth at the World Trade Organization, they are designing policies to put the very opposite into effect in Canada. How long will those subsidies stand up? This agreement was not designed to stand up very long at all. It is to get them through a critical period. This is a full retreat. It is window dressing. It is trying to save some face in the face of a very badly designed agreement.

The heritage minister picked a fight with the Americans and she lost. The bill should never see the light of day. That is the position of the Reform Party. We will not be supporting it.

Foreign Publishers Advertising Services ActGovernment Orders

10:40 a.m.

Ottawa—Vanier Ontario

Liberal

Mauril Bélanger LiberalParliamentary Secretary to Minister of Canadian Heritage

Mr. Speaker, I am a little perplexed with what we are hearing from the official opposition which resisted Bill C-55 all the way through. It was totally opposed to any form of support for our cultural industries, the magazine industry in particular. All of a sudden it is crying that we have sacrificed this industry, which is total nonsense, by the way. It is rather amusing to see this huge flip-flop on the part of the official opposition, the only party opposing the legislation on some grounds on which it has now totally shifted.

In the process it has tried to direct personal attacks, as it always has. It gives the impression that it cannot do otherwise. It cannot debate the notion of ideas. It directs personal attacks to the minister, which is nonsense. That is not what it promised to do when it came to Ottawa. It is not living up to expectations.

These things need to be said. I will read a couple of quotes for members. One is from a fine gentlemen who writes for the Toronto Sun , Hartley Steward. He used to publish the Ottawa Sun . He is certainly not a friend of this side of the House but perhaps more of the other side of the House. Here is what he had to say on this matter:

—despite claims by the magazine industry's lobby groups that this is the beginning of the end for Canadian magazines, the deal is a pretty good one for those who own Canadian magazines. American split-run editions will be allowed to carry only 18% Canadian advertizing. Should they wish to carry more, they will have to set up a Canadian office and carry “substantial” Canadian content. If “substantial” is regulated to mean “majority” it is, indeed, a major concession on the part of U.S. trade officials.

Would the member like to comment on that quotation from Mr. Steward?

Foreign Publishers Advertising Services ActGovernment Orders

10:45 a.m.

Reform

Charlie Penson Reform Peace River, AB

Mr. Speaker, the Reform Party was and still is, I believe, the only party that has resisted and said that it is dead against this agreement. The reason is that the evidence has shown that this agreement, this so-called exemption, did not exist. The exemption the government pretended was available to the magazine industry simply did not exist. I believe it was very misleading for the Liberal government to pretend it did.

When the free trade agreement was signed in 1988, Canada supposedly had an exemption clause on our cultural industries, but there was a cost to that, a price to be paid. The price to be paid was that if Canada did that, the United States had the right to retaliate in equivalent effect. That is the essence of this. We have seen it come home. We have seen the cultural industries now say that they do not want any more exemptions. The government told them about how great these exemptions were but they are not serving them well at all.

Instead of saying that the magazine industry has been sacrificed, I would say it has been misled. It continues to be misled because this is the same government that suggests in a report tabled today that Canada is going to protect cultural industries in the next round of the world trade talks, that there is going to be a cultural instrument, a cultural agreement in place.

We know what happened in the so-called failed talks of the MAI. One of the key reasons that failed was the cultural industries exemption. They could not arrive at any agreement as a result of that. I suggest that there is not agreement and there will not be agreement at the World Trade Organization for that exemption clause or any cultural agreement.

Most Canadians would suggest that the United States is the main threat to Canadian culture. That is what is perceived. That is the reason these things are designed. We have NAFTA. We have the original free trade agreement, whether the World Trade Organization comes to an agreement or not.

The United States' biggest export, I believe, is its cultural industries. The Americans regard it as commerce. Think about it for a moment. It is their biggest export. If we think they are going to say that these things are off limits or exempt, I do not believe that position is credible.

It is wrong for the government to pretend that certain conditions exist internationally that will protect our cultural industries in that way. It is wrong and I do not think the government should be doing it, nor the parliamentary secretary or the Minister of Canadian Heritage.

The best thing that can be said about what has happened with Bill C-55 is that it is very much a face-saving gesture. Canadians lost. The Canadian government lost because now we are going to have to subsidize the magazine industries. The Liberal government lost. It got beat up very badly on this. It put the Canadian companies that were on the retaliation list through a painful period of time in our history. For one year they did not know if they were the industries that would be retaliated against.

We had all kinds of presentations from the steel, beef and lumber industries. They told us not to let this thing pass because they may be the ones that would face retaliation. Industries that had already faced tough times in dealing with the Americans possibly would be the ones that would be hit with further duties. It put them through an uncertain time which is unfortunate. It was an uncertain time.

There are legitimate fights that we need to take action on with the Americans. This is not one of them.

There are legitimate fights in the area of softwood lumber. The agreement on softwood lumber is due to expire in less than two years. It is one where Canada has to make significant progress next time around. The softwood lumber managed agreement which this Liberal government put in place is not working. The United States has taken action against rough header lumber. It has taken action against pre-drilled studs. There is going to be more action. We were promised five years of peace by the Liberal government for the forestry sector. What did we get? Anything but.

There is going to be a fight. Energy will be expended in the area of softwood lumber in the next two years. I suggest that at least we put our energies where we have some chance of winning and where we are right on the issues. That is not taking place at the moment.

The cattle industry is facing dumping charges and countervail actions by the United States. The steel industry is continually harassed in terms of facing dumping charges and it has to defend itself against unreasonable action. That is where the trade department and the Canadian government should be putting their energy. Unfortunately that is not the case right now.

With that, I suggest to the parliamentary secretary that there are many different views from Canadians as to whether it is a win or a loss here. If he were to canvass some of his colleagues on the government front benches, he would find there was division all through this debate right inside his own government.

When Canadians are asked what is important to them, what are the priorities and what we should be fighting for, they are talking about things like lower taxes. They are talking about things like less regulation in their lives. The so-called cultural protectionism this government has been providing and advancing as a priority is certainly not a priority for Canadians.

We need to be honest with Canadians. We have to give them a firm assessment of what is possible and what is not possible in future trade talks. I would submit it is not possible to get this cultural protection in any international agreements because there is not international agreement out there.

The United States is probably one of the countries that is most opposed to the idea of cultural protectionism. The Americans very much see this in a different light than Canadians do. They see this as an aspect of business, of commerce, and this Liberal government does not.

I am concerned when this government talks about cultural protectionism. What if other countries were to take the same attitude? What if other countries were to say that they were going to make their countries off limits to Canadian cultural businesses?

What about Canadian artists who want to work in Nashville? What about Canadian artists who want to work or who are currently working in Hollywood? If the Americans were to take this dog in the manger attitude that we have no access to their country, that they are going to protect it, a number of Canadian artists would not have the access to work in the United States.

It is badly designed legislation. The evidence of that is here in the amended version of Bill C-55.

Foreign Publishers Advertising Services ActGovernment Orders

10:50 a.m.

Haldimand—Norfolk—Brant Ontario

Liberal

Bob Speller LiberalParliamentary Secretary to Minister for International Trade

Mr. Speaker, first I want to respond to the remarks of the hon. member from the Reform Party regarding this bill.

I am somewhat surprised that the Reform Party on the one hand keeps claiming we can direct U.S. policy on trade and that we should somehow be standing up for farmers. On the other hand, when it comes to our cultural industries and what is important to Canadians and identifying Canadian symbols, the Reform Party would have us just walk away and do whatever the Americans want us to do.

Before the hon. member leaves, I would like to say that in terms of his comments regarding the cultural industries in our committee report, we did not come out and claim that somehow in a new round we would be able to protect all of the cultural industries in Canada. Our recommendation stated that at the WTO there should be a way in which countries can come together to discuss culture and put forward some of the interests of Canadian culture. We feel the Canadian government and certainly the Minister of Canadian Heritage and her parliamentary secretary have done that very well with regard to Bill C-55.

We should take that issue further. At the next round of WTO negotiations in Seattle at the end of this year, we should come together with the different countries in the world that feel culture should be on the table and find a forum under which we can discuss those issues.

I appreciate the opportunity to speak to Bill C-55. The Department of Foreign Affairs and International Trade thanks the Minister of Canadian Heritage, her parliamentary secretary and her department for all of the hard work they have put into this bill. We are very appreciative of our Minister Marchi and the Prime Minister who together with the Minister of Canadian Heritage stood up for Canadian interests.

Foreign Publishers Advertising Services ActGovernment Orders

10:55 a.m.

Reform

Howard Hilstrom Reform Selkirk—Interlake, MB

Mr. Speaker, I rise on a point of order. Have the rules changed in the House and we are going to refer to each other by our names in this place? The member was talking about Minister Marchi.

Foreign Publishers Advertising Services ActGovernment Orders

10:55 a.m.

The Deputy Speaker

I did not hear the member refer to Minister Marchi. Normally if I hear that sort of thing I would certainly intervene. I am sure if the hon. member for Haldimand—Norfolk—Brant made such an error he would not want to repeat it.

Foreign Publishers Advertising Services ActGovernment Orders

10:55 a.m.

Liberal

Bob Speller Liberal Haldimand—Norfolk—Brant, ON

Mr. Speaker, I was so proud of the work done by the Minister for International Trade that his name might have slipped out of my mouth. It in no way was meant to go against the rules of the House. I would never do that.

The work done by them was work done on behalf of Canadians. It was certainly done under duress at a time when most of the opposition parties were onside with us, with the exception of the Reform Party. It constantly criticized us for not standing up for one sector of society and criticized us at another time when we were standing up for an important sector of our economy and standing up to the Americans.

Sometimes in international trade it is difficult to get a deal. Rules are complex and different interests and different parties are involved. These things take some time. Industries such as the steel industry in my riding, which is very important, have an interest in this.

I want to also take the time to praise the industries that did not jump on the bandwagon and take the American line like the Reform Party did. They put forward good arguments when discussing this matter with my minister and the Minister of Canadian Heritage as well as our caucus members. Again I thank the Minister of Canadian Heritage for standing up for the steel industry in her area.

It is important to recognize that these amendments to the bill represent a new stage of certainty and security in the evolution of Canadian culture as expressed by the Canadian periodical sector. In the legislative void created we accepted and implemented the WTO decision. It is very important to remind members that when the WTO came down with its decision, Canada followed the rules. We came forward and did what the WTO did, as we do internationally and as we hope other countries do. We went further to make sure Canadian culture was protected.

Security in the future of Canadian stories told in these periodicals will continue to thrive through an investment policy which will foster Canadian content. Most important, there will be jobs for Canadians in the periodical sector. Canadians will be provided with the opportunity to read about themselves and to know about themselves and to appreciate more what their country is about.

We have achieved this end through discussion, through co-operation and through working together with our American friends. This is the way two countries so intertwined in trade should work. Rather than battle a country with which we share a common border and are close in many ways we should resolve these issues through discussion.

We pointed out that Canada has one of the most open markets in the world for foreign magazines. Canadians enjoy reading about themselves but they also enjoy reading about foreign lands and seeing these through a Canadian perspective.

We explained and we also listened. In the end we struck a deal that was not only consistent with our cultural policies, but for the first time in our bilateral relationship with the United States, it agreed to and has recognized that Canadian content is a legitimate Canadian trade objective. That is the first time our American friends have done this.

These achievements, however, did not come without a cost. In any negotiation there is some give and take. We had to provide something in exchange. That is how negotiations work.

We agreed to let foreign publishers have limited access to the Canadian advertising services market, but not enough to inflict damage on our ability to promote that market. It was enough to show that we were willing to give something in negotiation, but, most importantly, not enough to jeopardize Canadian culture as it is expressed in our magazines. However, it was enough to remove the threat of damaging trade action by the Americans.

Between January and last week no less than 10 meetings were held between Canadians and American groups working on this agreement. After all, we are each other's best customers. We find that if we can negotiate, if we can sit down, if we can show each other our differences, then we can move forward more quickly.

We have more than $1.5 billion in trade crossing the border every day. That is why we sought to resolve these issues through dialogue. A trade war would have been far more damaging.

We gave a little, maybe too much for some of our friends on the other side, maybe too little for others, but that is what happens in negotiations. There is give and take.

We should also remember that Canada and the United States have agreed, through dialogue, to other agreements, which were mentioned by the Reform Party, concerning issues of softwood lumber, issues of wheat and agricultural products. When all of these issues came forward we did not end up with a battle; we ended up again giving a little, taking a little, but we ended up with an agreement.

I do not think anybody who knew about the free trade agreement and the NAFTA which followed expected everything to be rosy. In fact, I do not think any trade agreement in the world could make absolutely certain that there would not be disagreements with neighbours. However, we find the best way to deal with these disagreements is through negotiation.

The desire to resolve these disputes through discussion is not only a matter of preference between friends, it is also the practical approach and the best way to deal with these issues. If the United States did retaliate against those industries that were the targets—steel, apparel, plastics and lumber—there would have been a chilling effect on our export markets and our export contacts in these areas. While we would have had the right to challenge the United States pursuant to the NAFTA, Canadian exports still would have suffered. The rules are there and we have to make sure that we understand those rules to put forward our argument and to protect the industries that we hold important in this country.

That is why the Government of Canada preferred a negotiated solution; not a solution at any price, or one that played one sector off against another, but a mutually satisfactory agreement and a balanced agreement.

It was the balanced agreement which was signed last week that led us to introduce these amendments. The amendments to this bill provide increased certainty and security for the Canadian magazine sector and, thus, an ongoing and strengthening venue for Canadians to communicate with each other and to learn more about their country.

We certainly thank the industry itself, which provided the government with a lot of the information and a lot of the resources it needed to put forward this argument. That is the best way to do it; to work through the industry, through those sectors that are concerned about these issues, with the co-operation of the provinces, with the co-operation of Canadians and the NGOs to put forward an argument. That is why we win these arguments. That is why we have moved ahead in trade. That is why our trade numbers keep growing. Even though we are a somewhat small country, when we are put against our larger neighbour to the south I think we do pretty well. If we go around the world and talk to other countries that deal with the Americans on trade issues, most of them look to Canada to see how we do it because we have been successful.

I want to say thanks again to the Parliamentary Secretary to the Minister of Canadian Heritage, the Minister for International Trade and the Minister of Canadian Heritage for their hard work.

Foreign Publishers Advertising Services ActGovernment Orders

11:05 a.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Mr. Speaker, I listened carefully to the hon. member, who spoke about the international trade aspect of the magazine bill which we are debating today. He said in his remarks that if Americans did retaliate there would be a chilling effect on our trade.

If he knows that there would be a chilling effect, why does he not bring the whole issue into perspective and mention it to the minister, whose selfish motive is to have this bill passed even if it affects the steel industry, the plastic industry, the agriculture industry and the textile industry? Would there not be significant damage done to the international trade relations we have with the U.S.? We have more than $1 billion in trade with our major trading partner every day.

The member also mentioned that Canada will have to argue at the World Trade Organization in the case of retaliation. We all know that subsidies hurt Canadian businesses or Canadian interests. We know what the story is on softwood lumber. We know what the story is on agricultural trade. We saw what happened a few months ago with agricultural trade. We also know that the government sold out the Canadian interest on the Pacific salmon fishery in the recent treaty it negotiated. It has already lost the war on magazines with the Americans.

Can the hon. member shed some light on this? What will be the effect? Since he is an international trade specialist himself, can the hon. member shed some light on how much these subsidies will cost Canadian businesses, as well as American businesses? Because if this goes to the World Trade Organization, according to chapter 11 of the NAFTA, the subsidies will have to be given to American businesses as well. How shameful. Can the hon. member shed some light on how much these subsidies will cost Canadian taxpayers?

Foreign Publishers Advertising Services ActGovernment Orders

11:05 a.m.

Liberal

Bob Speller Liberal Haldimand—Norfolk—Brant, ON

Mr. Speaker, as I said earlier, international trade is a very complex issue. I think the hon. member should go back to his researchers to ask them why they would give him such false information as to put forward in the House the suggestion that we would have to subsidize American companies. That is not the case. It is not even on the board. Most people who have been following this issue know that.

I want to tell the hon. member, because it is a very important point and I think it is an important point for Canadians to know, that what we are talking about here is the 20% of the market that we now control. American and other foreign companies have 80% of the shelf space. We are only talking about 20%.

Is it his position and his party's position that we should all of a sudden give up this 20%, that we should not stand up for Canadian periodicals and Canadians? That is certainly not the position on this side of the House.

The hon. member should know if he is sitting in this House as an elected Canadian member of parliament that it is the role of the Canadian government to stand up for Canada; not to mouth American interests, not to mouth American big business interests, but to stand up for Canadians and to allow Canadians the opportunity to learn more about themselves, to learn more about their culture.

We have a large country. We cover millions of square kilometres of space, with people from the far north to the west coast and to the east coast who want to know about each other, who want to be able to read magazines about life in these areas.

I want to make it clear that they are not afraid to read American magazines or foreign magazines, but they would like to know about these issues from a Canadian perspective. We are only talking about 20% of the market that we hold in that shelf space.

There is some point at which Canadians need to stand up to bullying tactics. That is what we did. We told our friends, and again I say our friends the Americans, that we were not prepared to let their invasion go any further. That is what the Minister of Canadian Heritage did and every Canadian should be proud of that.

Foreign Publishers Advertising Services ActGovernment Orders

11:10 a.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Mr. Speaker, the hon. member mentioned in his speech that 80% of magazines on the stand are foreign magazines. Let me give him some true facts.

The government has also been saying that 50% of magazines purchased in Canada are foreign magazines, but the latest numbers on readership, taking into account controlled circulation, the magazines distributed via bulk delivery, including magazines received in newspapers, show that only 4.9% of magazines read in Canada are bought off the stands.

Magazines received by paid subscription account for 35.7% of magazines read in Canada, and 59.4% of those magazines read are received through controlled circulation. Therefore, 75% of all magazines read are received by controlled circulation and 95% of those magazines are Canadian owned.

In light of these facts, I ask the hon. member once again, in dollar terms, what is the value of the subsidies they will be giving to Canadian businesses and possibly to American businesses?

Foreign Publishers Advertising Services ActGovernment Orders

11:10 a.m.

Liberal

Bob Speller Liberal Haldimand—Norfolk—Brant, ON

Mr. Speaker, as my hon. colleague down the way says, nonsense. The fact is that we will not be giving any subsidies to American companies. That is just one of the facts.

At some point in time, as a government and as Canadians, we have to decide whether or not to take a stand. We decided as a government—the Minister for International Trade, the Prime Minister and the Minister of Canadian Heritage—that the Americans had crossed the line and that we were not prepared to give away that part of the industry.

That is exactly what we did. That is what these amendments are doing today. They are trying to make sure that Canadians in the future, our children and our children's children, will be able to read about their heritage and their country from a Canadian perspective. They will be able to read things which are written by Canadians and they will be able to see the world through a Canadian lens.

Had we not acted, that would not have been the case. I thank all of those in the industry, members on our side of the House, and those in the opposition who understand the importance of this, for their hard work. We took a stand and Canadians will remember that in years to come.

Foreign Publishers Advertising Services ActGovernment Orders

11:10 a.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Mr. Speaker, I rise on behalf of the people of Surrey Central to speak in opposition to Bill C-55, as well as the Senate amendments.

However, I want to speak in support of my colleague's amendment, the amendment put forward by the heritage critic of the official opposition.

Bill C-55 concerns advertising services supplied by foreign periodical publishers. The heritage minister, right from the beginning, has mismanaged the bill.

If enacted, the bill will prevent Canadian advertisers from advertising in foreign magazines that come into Canada. This is not a heritage matter; it is an international trade matter.

The international trade minister and the heritage minister are fighting over the issue. The trade minister wants to do his job but the heritage minister will not let him do it. She goes so far as to almost ruin our trade relations with the U.S., our greatest trading partner.

When the minister bans Canadian advertisers from selling their goods and services in foreign magazines, the minister is telling Canadian advertisers that when it comes to freedom of speech they are second class citizens. The Surrey business community which I represent should not be told how to run its business. Businesses should not be prevented from doing anything that will grow their businesses, make them more prosperous and enable them to hire more workers or maintain the present jobs they have created in the small business industry.

In the government's attempt to control the American magazine industry, it is trampling on the rights of Canadian firms from coast to coast to coast. Why should Canadian firms allow the heritage minister to dictate to them where they can or cannot advertise their goods or services?

Did the minister consider the damage that would be caused to these firms? I am sure she did not. Did the heritage minister consider the damage that would be done by the retaliation promised by the Americans if Bill C-55 is passed? I am sure she did not. She is not concerned about the fate of small businesses and their lack of advertising opportunities. Once again we are experiencing the arrogance of this weak Liberal government with no vision.

Before I go further, Mr. Speaker, I will be sharing my time with the hon. member for Calgary East.

The big question is how much are these subsidies to the industry going to cost Canadian taxpayers? We asked the minister this question but did not get an answer. Canadians deserve to know the answer.

Canada's small businesses know what they need to grow and to be prosperous. They know how to run their businesses. They do not need to be dictated to and to have their freedom restricted by the government. The government continues to kill jobs in Canada.

It is not bad enough that Bill C-55 will hurt our economy and our firms, what is worse is the minister pushed the Americans into promising retaliation if Bill C-55 is enacted. She is going ahead with Bill C-55 anyway without knowing what the effect will be on Canadian businesses.

This is the same minister who insisted that she would abolish the GST in order to get elected. That promise was broken and she was forced to abandon her stubborn ways and seek re-election because the GST was a lot more powerful than she was. The business community across Canada suffers from the effect of the GST and the heritage minister has already shown us that she cannot help us with the GST problem. There should be no mistaking the American promise of a billion dollar trade embargo for a Liberal GST promise.

The Americans are not fooling. They are not desperate Liberal members of parliament who will say anything to get elected. They mean what they say. The Americans are quite serious when they say they will hurt our economy badly with trade retaliation in the steel, plastics, textiles, lumber and agricultural industries. The heritage minister has poked the American elephant with a sharp stick. The American elephant has already warned her that the American elephant does not fear mice or former rat packers.

What purpose will the minister serve with this bill if she succeeds in having Canada slammed by an American trade embargo? What is the point? What is the use of Bill C-55 if we are slammed by a trade embargo by our biggest and oldest trading partner? A billion dollars of trade a day; it is going to affect our economy.

Why is the government not more concerned about building trade rather than damaging trade? Why would the government allow the heritage minister to pursue her policy, which is Bill C-55, that promises to be so terribly destructive to our trade? Let me tell the minister that when she lives in a glass house she should not throw stones at others.

There is another important aspect I would like to bring to the attention of the House. As a multicultural country, many of our ethnic communities or minorities rely on foreign publications to keep the Canadian communities in regular communication. The heritage minister's Bill C-55 will restrict the advertising that Canadian firms can buy in these foreign publications. Why would the minister be so negligent as to penalize these diverse and sometimes small ethnic communities? These communities do not have their own newspapers, magazines or other publications.

The heritage minister has set Canada up for U.S. trade retaliation risking the jobs of thousands of Canadians and our country's standard of living. The Senate cannot fix this bill with its amendments. It cannot repair the damage done to our trade relations with the Americans because of what the heritage minister has done. When she banned Canadian advertisers from selling their goods and services in foreign magazines, the minister told Canadian advertisers that when it comes to freedom of speech they are second class citizens.

Bill C-55 should be opposed because it puts an unreasonable limit on free speech and freedom of the press. Furthermore, Bill C-55 impinges on property rights and freedom of contract as granted by the 1960 Canadian bill of rights and common law.

Bill C-55 is not worth the potential damage it will do to our economy and our job market. Bill C-55 is not worth the risk to Canada's international reputation as an advocate of rules based trade that is supported and promoted by international trade tribunals for settling trade disputes.

Therefore, I oppose this bill and I tell Canadians that this bill is damaging Canadian trade relations and Canada's trade.

Foreign Publishers Advertising Services ActGovernment Orders

11:20 a.m.

Reform

Deepak Obhrai Reform Calgary East, AB

Mr. Speaker, it is a pleasure for me to rise today in the debate on Bill C-55, an act respecting advertising services supplied by foreign periodical publishers.

Before I do that, as I think this is my last speech in the House before we break for the summer, I would like to wish all the members a good summer. I would like to remind government members that today the united alternative results will come out and they will have a lot to think about over the summer.

I am glad to have one more opportunity to debate this bill before the House breaks for the summer. This is a very important piece of legislation. As the official opposition trade critic, I am particularly interested in this bill because it explores the contradiction between our role as an open free trading society and the defence of our culture.

Canada is blessed with a diversity of cultures. Culture is an extension of a civilization. It is an evolution and its maturity depends upon how the citizenry chooses to nourish it.

Canada's identity and culture is the sole domain of its own citizens. It is not the role of the bureaucrats to legislate what Canadians will read, think or write, yet this is precisely what we have with Bill C-55.

The official opposition values the cosmopolitan Canadian culture we have today contrary to what other parties may think. We value the right of every Canadian to pursue the logic extension of their culture and religion. Yet we have here in Bill C-55 an attempt by the minister, by her bureaucrats and by self-interest groups to push their own vision of Canadian identity on the majority knowing full well that this is not what Canadians want. The Liberals continue to pursue an agenda of protection in the name of Canadian identity at the expense of other industries.

Last year in October the Minister of Canadian Heritage introduced Bill C-55. Last year the World Trade Organization handed down two rulings which found the provisions under the previous magazine advertising legislation ran contrary to GATT and WTO.

The government chose to introduce Bill C-55 which has never enjoyed wide public support. This bill is not about protecting Canadian identity; it is about protecting the Canadian publishing industry. This bill is about money, plain and simple.

In this debate I have heard the minister and colleagues across the House speak about wanting their children to read Canadian stories. They want their children to read about Canadian achievements. There is nothing wrong with that. That is a good idea. I think every Canadian would like to read about the achievements of their fellow Canadians, about culture, the works of Canadian authors. On that part I agree 100%, but this legislation is not doing that.

This legislation is wrong. This is ill thought out legislation. Why do I say that? Plain and simple, this legislation attempts to protect a small industry, the publishing industry. The publishing industry can survive on its own. Canadians will read what is written by other Canadians.

This bill is not about that. I disagree with the government when it says this bill is about Canadians and about Canadian achievement. It is not. This bill is the protection of one industry, forgetting that Canada has huge industries, forgetting that other industries are involved. We have signed trade obligations that we have to live up to as well. How will we do that? It is very simple. When they write and read what is published, Canadians will decide.

The fundamental point is that what is going to be read by whom is not for the government to legislate down our throats. It is for Canadians to decide what they want to read, what they want to buy, what they want to do. Those who are in the Canadian cultural industry have risen to the occasion without government support. They do not need government support. There are excellent cultural artists in this country who write good books, who write good stories. They do not need a government prop-up. They can do it and Canadians will love to read their writings. We can start by doing it in our schools.

This business of attempting to force on the Canadian public what the minister of heritage thinks should be cultural policy is wrong. A fundamental point on this bill is that the government should stay out of it and let Canadians decide. The artists who are capable do not need to be propped up by the government. That is the fundamental problem we have in supporting this bill. That is why we are not in agreement with this bill.

It is wrong for others to say that we are against what can be called our Canadian culture. We are not. We take extreme pride in seeing the achievements of our artists and people who work in the cultural industry but we also have obligations to other industries and this is impacting other industries.

The U.S. is right across the border. It has a huge cultural industry. We may feel threatened, but I do not think we will feel threatened with education and with the Government of Canada publicizing the great achievements of Canadians and such things. We can do more service for Canadian culture, for Canadian artists than just shoving a bill down our throats.

We have opposition from the advertising industry which is the one that is going to pay the price for this. We have opposition from other industries, the steel industry. All over the country we have this problem. Why? For just one little bill that is not going to have a major impact, I am sorry to say. Do we really think Canadians will go out there just because of this bill and read about these things? They will not. Canadians will read about Canada and Canadian achievements when the books and the things they desire are out there and when they have the desire. Canadian identity is on the rise in this country. We are all proud to be a Canadian.

The bill is absolutely wrong and that is why we are opposing it. We are not opposing it because we do not believe in Canadian culture. We are opposing it because it is an ill-thought out bill that has an impact on other industries and on jobs. It has a narrow definition of Canadian identity and Canadian culture.

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11:30 a.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I am very pleased to have the opportunity to rise in the House today to speak to Bill C-55.

I know members are eager to return to their ridings and to go home, but we in the NDP believe that the bill today is a very important bill. We intend to have as many members as possible speak to the bill because it is very critical in terms of the protection for our cultural industry.

Earlier today, the member for Saint John rose in the House to call for an emergency debate on the merchant marines. She stated that the merchant marines who served in the war have never had recognition nor have they had their pensions. I make this remark because she said very eloquently that we would not be here today if the merchant marines had not fought or contributed to defending our country and democracy. That is very true. We would not be here today in the House or in this kind of democratic institution.

In the same vein, we should think about what it is that defines us as Canadians, which is partly what the bill is about. What is it that defines us as Canadians. Sometimes people believe that is a difficult question to answer. I, as do my colleagues in the federal New Democratic Party, believe that one of the things that defines us as Canadians is our culture. Whether it is our writers, our filmmakers, journalists, editors, publishers, printers, readers, children who may be involved in creative writing, our artists, visual artists, performers or theatrical artists, our Canadian culture and diversity is something that is very critical to who we are as a nation and as a people.

That is why members of the NDP are so concerned about Bill C-55. Even though it represents a small portion, just one piece of our cultural industry, it is an important piece and needs to be examined under the microscope of whether or not the bill will protect and enhance Canadian culture in this country or whether it is taking us down the slippery slope and the road toward further destruction.

In listening to the debate today, in particular from the Reform Party members, it has been very interesting to hear the discussion and the points of view that are held and to hear the Reform members raise the question of how we regulate culture. I have heard Reform members say that it cannot be done. However, in their next breath, they have also pointed out that the biggest export from the United States, a very massive economy to the south of us, is the cultural industry.

Reformers say that culture cannot be regulated or protected, but just a few moments ago we heard a Reform member say that culture is just another industry. The Reform member said that we should not worry because the bill was just about another industry and that we should leave it to marketplace. We in the New Democratic Party have a very different view. We believe that, yes, there is a cultural industry but it is intrinsic to who we are as Canadians and it demands, because there are imperatives, whether it is on magazines, broadcasting, the printing industry or the performing arts, that we stand in solidarity with the 987,000 cultural workers in this country who give us that definition of who we are and who allow us to speak to one another with vast differences in the regions, where we have come from and who we might be.

The NDP believes that we must stand up and protect our cultural industries and our magazines. That is why we believe this debate on Bill C-55 is so important.

My riding of Vancouver East is home to many cultural workers. I think there is a myth that somehow Canadian society or the government subsidizes cultural workers and the arts. In actual fact, I think the opposite is true. Cultural workers, and very often the culture industry, subsidizes the rest of us.

I know from artists, writers, people involved in magazine writing and independent journalists that people are desperately trying to get a message out about what is happening in their own communities and in their own lives and to have debate about different issues. Many of those people operate in an environment that is threatened all the time. This is again why the NDP believes very strongly that we have to stand in defence of Canadian culture and Canadian cultural workers. Our critic, the hon. member for Dartmouth, has expressed this many times in the House. She is, herself, a well-known Canadian playwright.

It is really coming from that sort of premise that we in the NDP are very distressed, maybe not surprised but certainly distressed, about the route and direction that Bill C-55 has taken.

Originally, our party gave lukewarm support to Bill C-55 as something that would provide some protection. However, what has become increasingly clear over the course of many months and so-called negotiations is that the government has caved in. I have to agree with the Reform member who just spoke. It is not just on this issue that the government has caved in. One just has to look at the salmon treaty in my province of British Columbia to know that the Canadian government caved in on that one too.

It is distressing because the Liberal government had an opportunity to defend Canadian interests in dealing with the Americans and protecting our cultural industry. By not using the cultural exemption contained in NAFTA, which is yet untested, and by ignoring even its own legal advice about Bill C-55 being WTO-proof, the government in these so-called negotiations has actually shown that we have no interest in protecting our own culture.

It is also distressing because what we have learned from this process is the lesson the Americans have learned. They know that if they threaten a trade war, we will surrender. I heard a Liberal member earlier proudly stand up and say that we did not end up in a battle with the U.S. on this. I would agree, but the reason we did not end up in a battle is because we simply gave in to it. We should have had a battle. We should have been out there on the front lines, maybe with support from other parties. I know our critic would have been there if she had been invited to the table. We would have been there with cultural workers to say, “yes, this is something we want to have a battle on because we are not about to give in. This is the thin edge of the wedge”.

By refusing to use the existing trade rules to protect our split runs in magazines, we are basically saying that we will allow the Americans to make up international rules as they go along. We are very concerned about this. It is the thin edge of the wedge. It is only a matter of time before this massive industry, the largest export industry in the U.S., which is culture, goes after Canadian content on television or ownership levels in broadcasting. They might even go after our book publishing industry which, as we know, has been a very dynamic industry over the years. It is a dynamic industry but it is also very vulnerable to the massive industry south of the border. They could also threaten our Canadian film industry and our feature films. The list goes on and on.

I and my colleagues believe that the debate today on Bill C-55 is not just about the specific provisions of the bill. The debate is also about what will happen in the future, what the Liberal government will decide to do, and what course it will chose to take in terms of our cultural industry.

I would like to spend a few minutes just looking at the highlights of this so-called American deal, which I think we would characterize as a Liberal sell-out, and the amendments that have come back from the Senate. The reality is that the deal was made after the Americans threatened a trade war. Canadian trade experts, both inside and outside the government, have stated repeatedly that the Canadian version of Bill C-55 was WTO-proof and that the cultural exclusion in NAFTA would also protect Canada in any trade war.

What have we seen? After months of behind closed door negotiations, we have learned that the Prime Minister directly intervened and, as a result, Canada surrendered. If somebody doubts that, they just need to read the debates in the House, the discussions and the questions during question period.

The member for Dartmouth, our critic for culture and communications, has been following and monitoring this very closely because she has a keen interest in it and has a very good understanding of what the debate is all about. To give the member for Dartmouth credit, she has been able to expose and bring forward in the House just what a sell-out Bill C-55 is.

It is curious that the Liberal members characterize the amendments that have come from the Senate, that were part of this so-called American deal, as providing certainty and security. We have to really question that. What certainty and what security? It seems to us that the only certainty is that we are now embarked on a course where our interests are continually being put on the table and then whipped off the table because they have been sold off.

We know that the heritage minister responsible for this industry and for this bill went to the Senate and introduced the amendments that we now see in the bill. These amendments are really implicit to the capitulation that took place to the Americans. In fact, after using time allocation in the Senate, the Senate passed the bill—surprise, surprise—and we have it back in the House today.

What did Canada give away? Well, definitions of Canadian content, now editorial content, is considered Canadian as long as it is original to a magazine aimed exclusively at the Canadian market, not, and I stress not, if it was written by a Canadian. I think that is a very disturbing kind of definition.

The precedent is now set for the Americans to challenge the definitions of Canadian content under the WTO and NAFTA, which could have profound impacts on our protections in broadcasting, book publishing, film and even protections around all of our cultural institutions.

When we had control of our own market under the original Bill C-55, it was illegal for new split-run magazines to accept Canadian advertising. Under this deal, the Canadian government has agreed that we will allow new split runs to be created to invade our market with up to 18% Canadian advertising and, as we know, over a three year period. Since Canadian advertisers can write off a portion of their ad expenses spent on Canadian magazines on their taxes—and remember that can now include magazines with no Canadian content—the government is actually saying that it is Canadian taxpayers who are providing a subsidy.

When Bill C-55 first came forward it was with the support of the NDP caucus. We felt it was better than nothing. We were lukewarm warm about it but we did provide some support. It offered some protection to Canadian magazines from new split-run editions of American magazines.

We expressed our frustration very clearly. The bill seemed to be subject to bargaining with the Americans behind closed doors. Even so, the minister gave us her assurance that the spirit of Bill C-55 would be respected in any deal. We raised this point in the House continually, and we were always assured that the substance, the spirit and the intent of the bill would remain solid and would not be given away.

We now know differently. The so-called deal that was made is actually substantially different and has set us in the direction of completely selling out. The negotiations have not provided the kind of protection and the kind of defence that the minister stated publicly time and time again in the House and elsewhere.

The deal that was put together committed Canada to amending Bill C-55 in the Senate to permit foreign owned publishers to benefit from increased market access with respect to advertising directed primarily at the Canadian market. The deal also committed Canada to amending our foreign investment policy so that it falls under section 38 of the Investment Canada Act, allowing cabinet to regulate or prescribe what and how much foreign ownership Americans can have in our industry.

The agreement also forces Canada to allow for increased ownership, up to 51% after 90 days and up to 100% within a year, subject to the benefit test. The deal also committed the Canadian government to change the Income Tax Act to allow advertisers to receive deductions for placing ads in American publications aimed at the Canadian market.

When we consider what has taken place over the last few months, the deal really sets out the surrender of our market by prescribing the formula to allow for American split runs to invade our market up to 18% within 36 months. As we have heard, we are already flooded with American material.

One of the most disturbing points for the NDP is that in creating this so-called deal it is curious the amendments and the process came through the Senate. Should that not have happened in the House of Commons? Why is it that the government allows that to happen in terms of introducing those amendments after the original introduction of Bill C-55? Why is it that took place in the Senate, a body that is undemocratic and unelected?

We are now debating a substantially different bill with major amendments from the Senate. The bill should have originated in the House with debate and discussion in the House. On those grounds alone we have very grave concerns and opposition to the bill because of the process used.

I will give an example of what the bill means. It is a very technically complex bill. I will lay out the following scenario of what might be possible. What is possible under the amended Bill C-55 if it goes through?

Suppose Mr. Jesse Helms set up a magazine in Miami aimed it at the Canadian market to attack our policy on Cuba. This is not an unlikely scenario. A majority of the editorial content of the magazine is written only for that magazine, meaning that under the Senate amendments to Bill C-55 it is considered a Canadian publication.

Canadian advertisers in that magazine can therefore deduct a portion of their advertising costs from their taxes. This allows the publisher, Mr. Helms, and his magazine to supply lower ad rates. The only Canadian who touches this magazine would be the consumer, if anyone happens to read it. No Canadian writers, no Canadian editors, no photographers or printers are required for the magazine to be considered Canadian under Bill C-55, the new deal.

The consequence is that existing Canadian magazines will suffer as a result of the subsidized ads in the new magazine, the so-called Canadian content, when ads are no longer placed in existing Canadian magazines. That is the consequence of the so-called certainty, security, defence, and protection from the Liberal government for our magazine industry.

This is why we stand in the House today to say that we will not go along with it. We can see through it and we will tell Canadians that this is a sellout. We have seen capitulation on other issues in this session. This is a sellout. We will not go along with it but not for the same reasons as the Reform Party. We want to defend and protect our cultural industry for Canadians because it defines us as Canadians.

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11:50 a.m.

Ottawa—Vanier Ontario

Liberal

Mauril Bélanger LiberalParliamentary Secretary to Minister of Canadian Heritage

Mr. Speaker, I listened carefully to the comments of the hon. member for Vancouver East. I sometimes have had a soft spot in my heart for the NDP when it stands for certain things.

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11:50 a.m.

Some hon. members

Hear, hear.

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11:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

I did say sometimes, especially when it stands for its principles. Lately we have been exposed to a few cases where it has not been very consistent. That is neither here nor there.

The member used some words repeatedly, ad nauseam throughout her remarks: capitulation, surrender, sellout and cave-in. I would like her to comment on the following quote. I asked the same question of the member for West Nova yesterday so there has been fair warning if she has followed the debates. It is a note that the Minister of Canadian Heritage received on May 25 and it states:

Dear Minister:

Congratulations for hanging tough on your recent negotiations. A compromise was forced instead of the usual capitulation. They play hardball—but so do you! I admire your style. Stay healthy and strong.

Best regards,

Norman Jewison.

I would expect the member would agree that Norman Jewison is certainly a very well respected Canadian icon in our cultural field. How then would the hon. member reconcile what he had to say with what she has just said?

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11:50 a.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I am very proud to say that the NDP is a party that has principles. We stand by them. We have stood by our principles when we were the CCF and now that we are the NDP. We know what we stand for, unlike the Liberals who like to shift around and basically take the direction of their strongest opposition, listen to the Reform Party and go down that road. We are a small group but we are very proud of the fact that we have the courage to defend our principles.

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11:50 a.m.

An hon. member

We don't cave in.